Nov. 15 (Bloomberg) -- In Silicon Valley, Bullis elementary
school accepts one in six kindergarten applicants, offers
Chinese and asks families to donate $5,000 per child each year.
Parents include Ken Moore, son of Intel Corp.’s co-founder, and
Steven Kirsch, inventor of the optical mouse.

Bullis isn’t a high-end private school. It’s a taxpayer-funded, privately run public school, part of the charter-school
movement that educates 1.8 million U.S. children. While charters
are heralded for offering underprivileged kids an alternative to
failing U.S. districts, Bullis gives an admissions edge to
residents of parts of Los Altos Hills, where the median home is
worth $1 million and household income is $219,000, four times
the state average.

“Bullis is a boutique charter school,” said Nancy Gill, a
Los Altos education consultant who helps parents choose schools.
“It could bring a whole new level of inequality to public
education.”

The growing ranks of U.S. charter schools in affluent
suburbs are pitting neighbor against neighbor and, critics say,
undercutting the original goals of the charter movement.
Families who benefit cherish extensive academic offerings and
small classes. Those who don’t say their children are being
shortchanged because the schools are siphoning off money and the
strongest students, leaving school districts with higher
expenses and fewer resources for poor, immigrant and special-needs kids.

Bullis Charter School offers its 465 students a rich,
interdisciplinary education unavailable in regular schools, said
Principal Wanny Hersey. She compared Bullis to Silicon Valley
companies such as Apple Inc. -- whose leader, the late Steve
Jobs, grew up in Los Altos.

Valley’s Spirit

“It really speaks to the spirit of the valley, trying to
be a model for innovation and unleashing human potential,”
Hersey said in an interview.

Bullis’s popularity shows that even parents in wealthy,
top-performing school districts such as Los Altos have become
disenchanted and are seeking alternatives. Bullis has higher
state standardized test scores and offers more art and
extracurricular activities than the Los Altos district, which is
cutting music and increasing class size. Bullis has achieved
this success while receiving about 60 percent of the
conventional system’s public funding.

Every child deserves a good education, Buffy Poon, a Bullis
mother of three and former EBay Inc. executive and Merrill Lynch
& Co. banker, said in an interview.

“It takes all of us, the ‘haves’ and the ‘have nots’ (I
cringe to use such blunt distinctions), to help improve the
world.” Poon wrote in an e-mail to the Santa Clara County Board
of Education, which oversees the school.

Netflix Founder

Parents in Los Altos Hills created Bullis in 2003 because
they were angry after the district closed their neighborhood
school, said Mark Breier, a founder of the school and former
chief executive of Beyond.com.

To get advice on starting Bullis, Breier said he consulted
with Silicon Valley luminaries and charter advocates. They
included Reed Hastings, chief executive of Netflix Inc. and
former president of the California State Board of Education and
venture capitalist John Doerr of Kleiner Perkins Caulfield &
Byers.

The founding parents won a charter from the Santa Clara
County Board of Education after the Los Altos district twice
rejected them. After giving spots to current students and their
siblings, Bullis reserves half of its slots for residents of the
neighborhood that fed into the old school.

First Charter

Last year, U.S. charter schools received $14.8 billion in
local, state and federal money, up from $4.5 billion in 2003,
according to an estimate by Washington-based Aspire Consulting
LLC, which analyzes public-education finances.

One out of five of the country’s 5,200 charter schools is
in a suburb, including affluent communities like Los Altos,
according to the National Alliance for Public Charter Schools.
In Minnesota, where the charter school movement began in 1992,
charters in the Minneapolis-St. Paul region initially focused on
black, urban neighborhoods and have since spread into wealthy
suburbs, where schools are often predominantly white, according
to research from the University of Minnesota Law School’s
Institute on Race and Poverty.

A quarter of U.S. charter schools don’t participate in the
federal free and reduced-price lunch program, compared with 2
percent at conventional public schools, according to a 2010
study by the Civil Rights Project at the University of
California, Los Angeles.

Racial Balance

That means they aren’t serving a significant low-income
population, Erica Frankenberg, co-author of the report and an
assistant professor at Pennsylvania State University, said in an
interview.

California’s 1992 charter law -- the second in the U.S.,
after Minnesota’s -- says schools should place “special
emphasis” on “academically low-achieving” students and make
an effort to reflect the “racial and ethnic balance” of the
population in its district.

Last year, about 2 percent of Bullis students spoke English
as a second language, compared with 11 percent in the district,
county data show. Bullis had about half the percentage of
Hispanic students or those with disabilities.

The charter school makes it tough for non English-speaking
students to attend because it doesn’t have materials in Spanish,
Doug Smith, a trustee on the Los Altos school board, said in an
interview. Lower-income families aren’t even aware that the
school is an alternative, he said.

‘Private School?’

On a recent afternoon, Anna Barragon, a 33-year-old
immigrant from Mexico, picked up her kids at the Los Altos
district’s Santa Rita Elementary School, down the street from
Bullis. Every day, she drives by the charter school.

“I don’t know anything about it,” Barragon said of
Bullis. “Is it a private school?”

“Bullis doesn’t fit with the spirit of the law,” said
Gary Rummelhoff, a former president of the Santa Clara County
Board of Education who sits on the board of a charter school in
nearby San Jose. “It only existed to serve a very wealthy
area.”

Bullis doesn’t discriminate because it accepts children
through a random lottery and broadly reflects the demographics
of the community, said Moore, son of Intel co-founder Gordon
Moore.

“Bullis is a public school, free and open to all,” said
Moore, who chairs the Bullis board.

The school plans to translate materials into Spanish and
advertise in Spanish-language papers, he said. Bullis offers
free lunches to low-income students and doesn’t participate in
the federal program because of administrative costs, Hersey
said. Less than 1 percent of students would qualify for the
program, she said.

Broadway and Stocks

On a recent school day at Bullis, a kindergarten class
studied Mandarin. Second-graders, sitting cross-legged under
pictures of Bach, Mozart, Liszt and Stravinsky, learned to read
music. A seventh-grade math class worked on algebra -- a year or
two before most U.S. schools -- while an advanced student did
linear equations at a high-school level. The school offers
electives in Broadway dance and the stock market.

“We’re lucky to have so many different things we can study
here,” said third-grader Ishani Sood, 8, taking a break from
her Mandarin class.

A foundation set up to help fund the school asks Bullis
parents to donate at least $5,000 for each child they enroll.
Those who can’t afford to pay should discuss the reason with a
foundation member, “recognizing that other school families will
need to make up the difference,” the foundation said on its
website.

‘Aggressive’ Requests

In an interview, Anna Song, a member of the Santa Clara
County Board of Education, said she received about 20 phone
calls from parents who felt pressured to give because of
repeated solicitation in school parking lots, e-mails and phone
calls.

“They are very aggressive in asking parents for money,”
said Laurie Uhler, a former Bullis parent. “If you don’t pay
it, word gets out that you aren’t doing your part.” Parents
often refer to the payments as “tuition,” she said in an
interview.

Donations are “purely voluntary,” Moore said. They are
necessary because Bullis receives less public money than the
district, which has a foundation that asks for $1,000 per child,
Moore said. The Los Altos School District last year spent about
$10,000 per student, according to state data. Bullis receives
about $6,000 in public funding, primarily because it doesn’t
qualify for money from a local tax that the school district
receives. On average U.S. charter schools get 19 percent less
local, state and federal money than traditional districts,
according to a 2010 Ball State University study.

District Cuts

The Los Altos school system is cutting back. Since 2009,
the district’s budget has fallen 9 percent to about $40 million.
Los Altos cut 20 teaching and other positions and eliminated
many of its music programs. Maximum class sizes in kindergarten
through third grade rose to 25 from 20. Bullis averages fewer
than 20.

Along with leaving the district with the hardest-to-serve
students, Bullis-related expenses have hurt the Los Altos school
system in other ways, said Randy Kenyon, an assistant
superintendent.

For each district student who attends Bullis, the system
loses about $5,000 in per-pupil funding, Kenyon said. Los Altos
pays about $300,000 a year for the school’s facilities, he said.

Hersey said Bullis can provide its enriched education with
the same amount of funding as the district, including donations,
because it has less bureaucracy and overhead.

Bullis last month won an appeal of a lawsuit against the
school district saying Los Altos must provide more space and
buildings under the state’s charter-school law. Bullis currently
operates out of portable classrooms. The case cost Bullis
$900,000 in legal fees, according to its tax filings. The
district spent about $700,000.

‘Sense of Entitlement’

Song, who originally supported the school, changed her mind
when Bullis’s charter came up for renewal last month.

In an open letter, Song cited the school’s “sense of
entitlement and lack of understanding of what it means to be
part of public education.”

Bullis “performed abysmally in serving socioeconomically
disadvantaged students,” she wrote. After a more than four-hour
session, attended by 200 people, many of them Bullis parents
wearing school T-shirts, the Santa Clara County school board
voted to renew the charter, 5 to 2.

During a break, Arash Baratloo, a Google Inc. software
engineer and Bullis parent, said he considered the $5,000
donation requested every year by Bullis to be “money well
spent.” He previously sent his child to a private school where
tuition was about $25,000 a year.

“It could be considered a bargain, but that’s not why we
came,” Baratloo said. “We were looking for the best education
out there, and that’s what we found.”